The majority of employers are failing to manage business use of employee-owned cars, according to new research from the Arval Mobility Observatory.

It found that 62% of companies do not have any form of grey fleet policy in place and only 16% have adopted what they describe as a “comprehensive” policy covering the subject.

Shaun Sadlier, head of Arval Mobility Observatory in the UK, said: “This is a new question that we have added to our annual research in 2023 and probably the single most worrying finding, given the widespread prevalence of at least occasional and often regular use of privately-owned cars for business journeys.

“It shows that a huge proportion of companies don’t have any formal structure in place for handling this crucial safety issue which, if it is not taken seriously, not only increases the chances of accidents, but could even see directors of companies being liable in the event of a serious incident.”

In the UK, it is a legal requirement under the Health and Safety at Work Act for any grey fleet vehicle to be verified roadworthy and legal by the driver’s employer.

Organisations must be able to evidence that their grey fleet employee holds a valid driving licence, business insurance, vehicle MOT and that the vehicle is taxed.

Sadlier explained: “Any vehicles driven for business bring the same level of responsibility for the employer, whether a company car or a privately-owned vehicle used by a member of staff for a work-related journey.

“That means a grey fleet vehicle needs to have the same level of risk management attention – covering everything from the driver to the suitability of the car to how it is maintained – as a company car provided by the business.”

To see so few fleets having a grey fleet policy in place is a “major concern”, according to Sadlier, and suggests that much work needs to be done to raise awareness among businesses when it comes to their legal obligations.

Out of those who do have policies in place, fewer than one in five have what they believe is a ‘comprehensive’ document.

“This is an area that requires a high degree of management attention and, in many cases, it is doubtful that a ‘simple’ policy will be adequate,” said Sadlier.

“However, many parts of the company car policy can be used directly or with some adaption to form a grey fleet policy. Along with certain controls relating to the use of a grey fleet vehicle such as setting maximum age and mileage of the vehicle, insurance cover requirements and more.”

Arval’s research also shows that there is little difference between companies of different sizes when it comes to adoption of grey fleet policies.

Among the smallest companies with fewer than 10 employees, 34% say they have a policy, while among the largest with more than 1,000 employees, the figure is 39%.

Sadlier said: “It is also surprising to see that these results are largely consistent across organisations of all sizes.

“It might perhaps be expected that small businesses have less resource available to effectively manage grey fleet than major organisations, but that doesn’t seem to be the case.

“What we are seeing is a problem that exists across all sizes of companies and where improvements really need to be made.”

For further information from Fleet News on cutting costs and risk from your grey fleet, click here.